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1ContentsPage1IntroduconPage2TheRealityofTransportaoninNCPage3OverviewReportsonTransportaoninNCASCEReportCardTRIPReportUrbanMobilityReportPage5MythsversusFactsWhatWePayforTransportaoninNorthCarolinaPage6FundingtheFutureNewSoluonsforMeengTomorrowsNeedsPage7ConclusionWHEREDOWEGOFROMHEREChallengesandOppOrtunitiesfOrtranspOrtatiOnfundinginnOrthCarOlinaFebruary2015CompiledbyNCGoPOBox14147DurhamNC27709www.NCGo.org WHEREDOWEGOFROMHERESummaryNorthCarolinaisfacingatransportaonCRISISOurstatewillseea43increaseinpopulaon-13.5millionnewresidentsby2040.NorthCarolinahasthe37thworstbridgesafetyinthenaonwith30ofbridgesratedasstructurallydecientorfunconallyobsolete.45ofNorthCarolinasroadsareinpoorormediocrecondionandcostdrivers241-340inextravehiclerepairsandoperangcosts.OurgastaxisalosingmodeloverthelongtermbecauseofrisingvehiclefueleciencyProjectedrevenueby2040willfall60BILLIONshortofancpatedneedsifwewantasafeecientandhigh-performingtransportaonnetworkthatfosterseconomicprosperity.RoadsCostofPoorRoadstoNCDriversBridges241ACTUALper-capitatransportaoninfrastructurecostsforALLsources40K80K120K160KTotalCostsperState-ControlledMileSCNCVATNNatAvg.ProjectedGasTaxRevenuesBillionsof2011Dollars6585ofTraffcFatalitiesonNorthCarolinashighways2008-2012InJuly2015thevariablerategastaxwilladjustbasedontheend-of-yearwholesale2014priceofgas.Thiscouldresultinadecreaseof6-8centgallonatthepumpanda300-400MILLIONlossinrevenue.ToavoidthisneartermcatastropheNCGorecommendsProacvelyLOWERandsetaoorforthemotorfuelstaxEndtransfersoftransportaonrevenuetotheGeneralFundAdjusttheHighwayUseTaxby1oronparwithsurroundingstatesIncreaseDMVLicenseandresgistraonfeesToaddresslong-termfundingneedsNCGourgesthelegislaturetoconsiderarangeofoponswhichcouldresultinapproximately126BillioninNewRevenueby2040toincludeAutoinsurancesurchargeTaxonautopartsAdjustweight-basedfeesforcommercialvehiclesExpandedinterstatetollingUser-basedmileagefees 2TheGoodRoadsState.ThatwasNorthCarolinasnicknamefordecades.Thatsbecausewiseleadersandanengagedpublicknewthatifsafetyandeconomicprosperitywereimportantwehadtoinvestinroadsbridgesandallmodesoftransportaon.Fastforwardtothenewmillenniumandwereagrowingstatepoisedtobethe7thmostpopulousstateby2030aheadofNewJerseyOhioandMichigan.AtthesamemeattheheartofhowwefundtransportaonliesanintractableaccounngdilemmaExpensesRevenueFornearly100yearsNorthCarolinahasreliedprimarilyontheMotorFuelsTaxgastaxtofundthelionsshareoftransportaonneedsinourstate.Butthesystemisbroken.Increasedfueleciencympgwhileagoodthingfordriversmeanseverymeourvehiclesmpgincreaseswegoalilefurtheronthesamegallonofgas.Wepaythesametogofurther.Thereforewepaythesameamountoftaxandconsumemoreoftheroad.Thusadecliningrevenuestream.Consumpton.Foralmosteveryitemorulityweusewearechargedonthequantyweconsume.Fortransportaonmostspecicallyhighwaysandbridgesuptonowweveprimarilypaidbasedonhowefcientlyourvehiclesconsumeeverymile.WiththeexceponofsomeminortollinginthestatedriversinNorthCarolinaeachpayfortheirconsumponbasedonhowecientlytheirvehicleoperates.BecauseituseslessgasthedriverofahybridToyotaCamrypayslessingastaxforthesamemileofroadusedbythedriverofatradionalgas-fueledCamry.Thatsnotequitablebutatitsrootitbeliesalargerproblem.Thecostofbuildingtransportaoninfrastructureisntdeclining.Theneedsourstatefacesarenotdeclining.Yetourstateisbeingaskedtodomoremaintainmoretransportaoninfrastructureandbuildnewfaciliestoaddressgrowthonashrinkingsourceofrevenue.WhatsatstakeUnder-invesngintransportaonhasveryrealconsequences.Poorsafety.Traccongeson.Vehicledamageandwear.Decreasedmobility.Missedeconomicopportunies.Allresultfromtryingtostretchtransportaondollarsbeyondtheirbreakingpoint.NCGobelievesthatnowisthemetoactmetochartourownfutureintermsofeconomicprosperitysafetyqualityoflifeandmobility.Itwillrequirevisionarypolicalleadershipandsupportfromthepublicthatelectedthem.Howwegothereandtheconsequencesofinaconwillallbelaidoutinthereportthatfollows.Sotoowillsoluons.Ourphilosophyiseveryideashouldbeonthetable.Letsconsiderallfundingmeasuresandworkbackwardstogarnersupport.Andasanorganizaonthatrepresentsbusinessesassociaonsciescouneschambersofcommerceandtransitagenciesthroughoutthestatewealsobelievethatratherthanargueovereveryonessliceofthepieweneedabiggerpie.WhereDoWeGoFromHereTransportaonGrowthandMeengNorthCarolinasFutureNeeds 3NorthCarolinaisuniquewhencomparedtomanystatesspecicallyourneighbors.OurdepartmentoftransportaonNCDOTmaintainsalmost80000milesofhighwaystatewide.ItissecondonlytoTexasintermsoftotalcenter-linemiles.ButwhatmakesourstatetrulyuniqueisthecombinaonofthelargenumberofmilesNCmaintainsPLUSacentralizedownershipmaintenanceofourhighways.NearlyacenturyagoNorthCarolinaoptedtoretainownershipofitshighwaysandmaintainwithstatefunds-unlikemoststateswhichrelyonamixoflocalandstatedollars.SoyoudontcrossfromoneNCcountytoanotherandexperienceadramacchangeinroadqualitysafetymarkingsorsignage.Butthisscenariorequiresastatewidenotlocalrevenuestream.EntertheMotorFuelsTaxorthegastax.Begunintheearly1920sNorthCarolinasgastaxhasremainedthemajorsourceoftransportaonfundinginourstate.Originally1centgallonitiscurrently37.5centsgallonbasedonavariablerate.Thatrateis17.5centspergallonplus7percentoftheaveragewholesaleprice.Thevariableratewasputinplacetoaddressuctuaonsinconsumponduetopricing.Thehigherthewholesalepricethelessthepublicconsumedthereforeahighervariablecomponentofthetaxwasleviedtokeeprevenuesomewhatneutral.Whenthepricefellandconsumponincreasedthetaxdropped.Foryearsthissystemworkedneasmostvehicleshadsimilarfueleciencyrates.Weallpaidaboutthesameintaxesfordrivingourshareoftheroad.Howevergasshortagesinthe1970sshiedinterestawayfromavehiclespowerandsizetofueleciency.Slltheimpactoffueleciencyhasonlybecomeabundantlyclearinrecentyearsasocialstandardsforimprovedfueleciencyhavebecomeformalized.In2011PresidentObamaannouncedanagreementwiththirteenlargeautomakerswhichaccountformorethan90percentofallvehiclessoldintheU.S.toincreasefueleconomyto54.5milespergallonforcarsandlight-dutytrucksby2025.Thatrepresentsa5percentincreaseinfueleciencyperyearstarngin2012.Thatincreaseinfueleciencymeanswellallbebuyinglessgas.Increasedfueleciencyisgoodgoodfortheenvironmentandfordrivers.Butbuyinglessgasalsomeanspayinglessingastaxandnowthefutureofourstatesmostimportanttransportaonsourcehasbecomestarklyclear.NCDOTprojectsmotorfueltaxrevenuestoincreaseslightlyunl2018thendecreaseunlabout2028andremainatunl2040.Inthefaceofagrowingpopulaonandrisingcoststobuildandmaintaintransportaoninfrastructureourgastaxwillonlyyieldabout33.9billionfrom2011-2040.StarngPointTheRealityofTransportaoninNCNCDOT2040PlanNCDOT2040Plan 4Yettheproblemremainsthatweneedaddionalfunding.InFromPolicytoProjectsthe2040PlanNCDOToutlineswhatthenancialneedsareinthefuturetoachievevariousLevelsofServiceLOS.ThoseareTargetLOSArobusttransportaonsystemthatmeetsprojectedneedsaddressesgrowthensuressafetyoersconvenienceandaccessibilityandfosterseconomicopportunity.LOSCAtransportaonsystemwhichisveeringtowardwide-spreadsafetyconcernsdeferredmaintenanceandcongesonandlandaccessissuesthatconstraineconomicopportunity.OurcurrentstatusisratedasLOSC.FundatCurrentLevelsThelastoponistosckwiththefundingwehaveinplacealreadywhichisfarbelowthatrequiredtokeepourtransportaonnetworkateventhesameservicelevelLOSC.Throughthe2040PlanperiodtheNCDOTwillneedtoinvestatleast86.3billionin2011dollarsjusttomaintainexisngLevelofServiceLOScondionsand114.1billiontoimprovethetransportaonnetworksperformanceandcapacityTargetLOS.Evensimplykeepingfundingatitscurrentlevelthereisnotenoughprojectedrevenueforecast.TheresnoshortageofexpertsweighinginonthesadstateofAmericastransportaoninfrastructureorthecostoffailingtoinvestinthefuture.Butoenreportsaregearedtowardsnaonaldataandtrends.Howeverthreesourcesrounelyfocusonstate-baseddataandspecicallycoverNorthCarolinaASCETRIPandTTI.ASCE-InfrastructureReportCardTheNCSeconoftheAmericanSocietyofCivilEngineersASCEdetailedinfrastructurechallengesinits2013InfrastructureReportCard.ASCErepresentsmorethan145000civilengineerswhoplandesignconstructandoperatethebuiltenvironmentwhileprotecngandrestoringthenaturalenvironment.InthereportcardASCEindicatedOfthe18165bridgesinNorthCarolina219212.1areconsideredstructurallydecientand329618.1areconsideredfunconallyobsolete.45ofNorthCarolinasroadsareinpoorormediocrecondion.ASCErecommendaonsincludedDevelopadiversefundingstrategythatwillsustainhighlevelsofqualityandserviceforuserswithoutburdeningtaxpayers.Promotesustainablepublic-privatepartnershipsandopmizethird-partycontractsthroughtransparency.Employmileage-baseduserfeesandotherroadpricingmethodwhenapplicable.MaintaintheexisngNorthCarolinagasolineuserfeeandpromotetheuseoftaxdollarsinbridgeconstruconprojects.Connuetoengagepolicymakerstoallocateappropriatefundinglevelstominimizefuturebridgeclosures.OverviewReportsonTransportaoninNorthCarolinaProjectedNeedsFundingandFundingGapBillionsof2011dollarsTargetLOSCurrentLOSConnuedCurrentFundingLevelsTotalNeeds122.8394.1366.17NCDOTResponsibility114.1186.3059.70TotalBaselineRevenues54.03BaselineFundingGap60.0832.275.67NCDOT2040Plan 5TRIPReportTRIPisanonprotorganizaonthatresearchesandevaluateseconomicandtechnicaldataonsurfacetransportaonissues.TRIPreportsontheNaonalandindividualstatestransportaonnetworksfocusingonsafetyandtheimpactoftransportaoncondionsondriversvehiclesandtheeconomy.Accordingtothe2014TRIPReportAnnually364billioningoodsareshippedfromNorthCarolinaand337billioningoodsareshippedtoNorthCarolinamostlybytruck.ElevenpercentofNCsmajorroadsandhighwayshavepoorpavementcondion.Pavementcondionon38percentofthestatesmajorroadsisratedfairormediocre.PoorroadcondionscostNorthCarolinamotorists2.3billionayearinextravehiclerepairsandoperangcosts340permotorist.Fiy-fourpercentofNorthCarolinasmajorurbanhighwaysarecongested.TraccongesoncostsAmericanmotorists121billionayearinwastedmeandfuelcosts.Roadwaycondionsareasignicantfactorinapproximatelyone-thirdoftracfatalies.Therewere1292tracfataliesin2012inNCandatotalof6585peoplediedonNorthCarolinashighwaysfrom2008through2012.TTIUrbanMobilityReportTTITheTexasAMUniversityTransportaonInstutestudiestransportaonandtraccongesonaroundthenaonandseekssoluonstotheproblemsandchallengesfacingallmodesoftransportaon.Inits2012UrbanMobilityReportTTIassignsvaluestohoursdollarsandfuellostduetotracinsomeofourstatesmostcongestedareas.AccordingtoTTIin2011TheaveragedriverintheCharloeurbanareawasted40hourseachyearstuckintracandloses898inthecostoflostmeandwastedfuelasaresultoftraccongeson.TheaveragedriverintheRaleigh-Durhamareawasted23hourseachyearstuckintracandloses502inthecostoflostmeandwastedfuelasaresultoftraccongeson.TheaveragedriverinGreensborowasted27hourseachyearstuckintracandloses588inthecostoflostmeandwastedfuelasaresultoftraccongeson.TheaveragedriverinWinston-Salemwasted20hourseachyearintracandloses435inlostmeandwastedfuelasaresultoftraccongeson.TTIresearchersconcludedthatthemosteecvewaytoaddresstraccongesonvariesbyurbanareabutthatinallcasesamul-facetedapproachshouldbeused.Thatincludesmoreecienttracmanagementandpublictransportaoninaddiontonewconstrucon.HowDoesInadequateInvestmentinTransportaonImpactSafetyTransportaondollarsdictatePavementcondionpotholerepairsBridgecondionLanewidthsRoadwaylighngLanemarkingsShouldersGuardrailsMedianbarriersClearsignageIntersecondesignThenumberoflanesExcessfuelconsumponTireweardamageSuspensionweardamageAcceleratevehicledepreciaonHowDoPoorRoadsImpactDriversCostsPoorroadcondionslikepotholesleadto 6Myth1WepaymorethanotherstatesTherstthingdriversinourstatesayisIshouldntpaymore-ourgastaxisalreadytoohigh.TruewhenyoucrossintoVirginiaorSouthCarolinathereisadropinthegastaxandthepriceatthepump.Butthatsbecauseinouruniquestatewepayfortransportaonprimarilyingastaxnotinothersources.Totrulycompareapplestoapplesyouhavetolookatallthefeesandtaxes-likepropertytaxeslocalfeestollsetcthatOTHERSTATEShaveinaddiontothegastax.WhenallthefeesarecombinedNorthCaroliniansactuallypayabout510yearpercapita-comparedtotheU.S.averageof657.Myth2DOTiswastefulwithworkersjuststandingaroundSince2007NCDOThasbeenthoroughlyengagedinaTransformaonplantocompletelyoverhaultheorganizaon.Hiringanexternalmanagementconsultanttheysetabouttodetermineanewstrategicblueprintprojectpriorizaonperformancemetricsandmore.NCDOTalsotookahardlookatitsstatodeterminewherereduconscouldbemade.Oneoutcomesince2010aloneisthereduconofmorethan2300Full-Timeposionsfromtheorganizaon.Myth3TheGovernmentiswastefulandbuildsprojectsthatareBridgestoNowhereStarngin2013GovernorMcCroryandNCDOTbeganaprocessofstreamlininghowtransportaonprojectswereselectedandpaidfor.PassedbytheGeneralAssemblythatyeartheStrategicTransportaonInvestmentsSTILawenablesNCDOTtomaximizeNorthCarolinasexisngtransportaonfundingtoenhancethestatesinfrastructureandsupporteconomicgrowthjobcreaonandhighqualityoflife.STIestablishestheStrategicMobilityFormulaanewwayofallocangavailablerevenuesbasedondata-drivenscoringandlocalinput.STIremovespolicsfromtheseleconoftransportaonprojects-nomoreporkforlegislatorsdistrictsbecauseofinuence.AndSTItakesahardlookatdata-economicvaluejobcreaontracreduconandmore-inassessingwhichprojectsadvance.InDecember2014thedra10-yearStateTransportaonImprovementPlanwasreleased.Theplanincludes1100projectsacrossalltransportaonmodescoverseverycountyinthestateandwillcreate300000jobs.YearAdminAbolishedFTEsFieldandEquipmentAbolishedFTEsTotalAbolishedFTEsFY10187751938FY1160371431FY12144288432FY134069109FY142280102FY1535263298Total48818222310MythsversusFactsWhatWePayforTransportaoninNorthCarolinaPer-CapitainGasandCarTaxesPer-CapitainGasandCarTaxesRoadandBridgeTollsPer-CapitaALLsourcesusedfortransportaoninfrastructuregasandcartaxestollspropertyandsalestaxes 7FundingtheFutureNewSoluonsforMeengTomorrowsNeedsNorthCarolinahas80456state-controlledmilesinitssystem-secondonlytoTexas-allofwhicharemaintainedwithstatefunds.Andcontrarytopopularbeliefourstateisextremelyecient.Thetotalspendingpermileis52282-thethirdlowestintheNaon.ComparethatwithNewJerseyastateofcomparablepopulaonwhichspendsinexcessof2Millionpermile.Slleciencywillonlycarryussofarinlightof42percentprojectedgrowthby2040-13.5millionNorthCarolinians.Thegastaxmodelwillnotproducesucientrevenuetofundtransportaonprimarilybecauseofincreasedvehicleeciency.ThesoluonIntroduceanumberoffundingmeasuresthatSPREADtheRESPONSIBILITYoverdierenttypesofusersandcolleconmeans.Accordingtoa2013reportfromtheInstuteforTransportaonResearchandEducaonITRE38stateshaveconsideredortried121dierentrevenueenhancementmechanismsleadingtothesuccessfuladoponorreinstatementof30revenueenhancementmechanisms.ThemostcommonrevenueenhancementmechanismsareGastaxincreasesorindexing24statesSalestax14statesOtherfeesandfares13statesMileage-BasedUserFees11statesTolling7statesBoomlinethetwomostcricalfactorsinvolvedindetermininghowdriverscontributetotheirimpactandconsumponoftheroadsremainUSEmilesdrivenandWEIGHT.Heaviervehiclesdomoredamage.AccordingtotheFederalHighwayAdministraonmostpassengervehiclespaytheirfullshareofpavementdamageswhiletruckspayaslileas50centsforeachdollarofdamagetheyimpartontheroadway.AndAccordingtoaseriesofarclesintheNewsObserverin2006anda2007GoverningarcleTrucksdesignedtocarryamaxweightof80000poundsoencarriedmorethan90000poundsA10000poundincreaseinweightequaleda42percentincreaseindamageonNorthCarolinaroadsTotalDisbursementsperState-ControlledMileTransportaonRevenueEnhancementOponsinNCBillionsof2011DollarsRevenueEnhancementOponsEsmatedTotalRevenueunl2040AssumedYeartoImplementConnueMotorFuelsTaxIndexing18.85OngoingIncreaseRegistraonLicenseFeeswithInaon6.132016EliminateTransfersfromHighwayFund4.252016RedirectShortTermvehicleLeaseFeetoNCDOT0.632016Addional1HighwayUseTaxSalesTaxonAutos3.252016DedicatedLocalVehiclePropertyTax0.502016AutoInsuranceSurcharge10TaxRate12.162020WholesaleMotorFuelsTax812.222020InterstateTolling6centsmiRural12centsmiUrbanadjustedfor3.5inaon41.932020VMTFee2centsmiadjustedforinaon26.642020TotalRevenueEnhancementOponsPotenal126.56FHWAHighwayStascs2012 8Heavytruckscostthestateanextra78millionindamagesperyearPavementoriginallydesignedtolast20yearswouldwearoutinsevenBeyondfactoringweightintotheequaonthefairestwaytogaugeadriversuseoftheroadsisonpureconsumponlikewithtolling.Whileitisntfeasible-fromacostperspecve-totollallroadsmorestatesareconsideringaMileageBasedUserFeesMBUFasameanstomoreaccuratelytrackconsumpon.Ratherthanpaybythegallongastaxwhichisimpactedbyfueleciencyusersarechargedbythemile.TheunknownforMBUFsarehowtobesttrackandcollectfees.Oponsincludengcarswithtechnologytoallowdriverstopayatthepumpaswithgasorpayfeesaspartofvehicleregistraonrenewals.PaymentscouldbebrokenoutacrosstheyeartoavoidonelargepaymentandMBUFsalsoopenthedoorforvaryingratesbasedonweight.WiththeproposedmodelanaveragecarCamrywouldbeheldharmless-payingthesameamountoftaxbutnotdecreasingovermewithincreasedfueleciency.ThePriuswouldpayaratemoreinlinewiththemilesdrivenbutslllowerthanaCamrybecauseoflowerweight.AndaheavierSequoiawouldpayonaratemorealignedwiththewearitinictsontheroadways.Boomlineissuessuchasprivacycolleconandlumpsumpaymentscouldallbeworkedoutgiventhewilltondareplacementfororenhancementtodiminishinggastaxrevenue.CurrentGasTaxModelVehicleGasTaxRateYrlyMilesMPGGallonsUsedTotalTaxToyotaCamry0.3651500025600219.00ToyotaPrius0.3651500050300109.50ToyotaSequoia0.36515000151000365.00ProposedTaxMBUFModelVehicleWeightlbsYrlyMilesFactorWxMFactorTotalTaxToyotaCamry327515000224315219.00ToyotaPrius304215000224315203.42ToyotaSequoia573015000224315383.17TherealiesarestarkNorthCarolinawillseea43percentincreaseinpopulaon-13.5millionby2040ThegastaxisalosingmodeloverthelongtermbecauseofrisingfueleciencyIfwemaintainthestatusquowefacea5BILLIONshorallbetweennowand2040.Ifwewantasafeandecienttransportaonnetworkthatfosterseconomicprosperitywefacea60BILLIONgap.Ourstatesabilitytogroweconomicallyaractnewindustryandsafelymoveworkerscizensgoodsandservicesisdirectlyimpactedbythecondionandbreadthofourtransportaonnetwork.Inaconwillnotsolvetheproblemnorwillpassingitalongtothenextgroupofleaders.Nonewtaxesorfeesareeverpopularbutneitherareclosedbridgespotholesormassivetraccongeson.Acngnowpreventsafundingcrisisfromoccurring.Andacngnowtoconsiderandenacttransformavefundingmeasurescannancewide-scaleimprovementsonexisngtransportaoninfrastructure-savingmoneynowcomparedtocostlyreplacementinthefuture.NorthCarolinadeservestobetheGoodRoadsStateagainbutthatrequiresanunderstandingbythepublicofthebenetsofinvesnginourtransportaonsystem.Moreimportantlyitrequiresvisionaryleadershiptoenacttransportaonfundingreformthatplansforandembracesthefuture.Notasachallenge-butasanopportunity.WhereWeGoFromHereDiggingDeep